R
r_v.s
Member
Would you please explain how one could hedge the risk of falling interest rates with an interest rate floor? In the April 2007 paper, the company in q1 has a fixed rate loan at 8%. When interest rates fall this borrowing becomes expensive. How does the floor help?
What is the 'on-sell'ing that part v talks about does that mean, the company buys some other product and sells it as its own??
What is the 'on-sell'ing that part v talks about does that mean, the company buys some other product and sells it as its own??
Last edited by a moderator: